Russia has begun a series of billionaire bailouts to rescue some of the Kremlin's favoured oligarchs from crushing debts to foreign banks.

VEB, the state development bank, yesterday approved a $2 billion (£1.22 billion) loan to Mikhail Fridman's Alfa Group to pay Deutsche Bank and save Alfa's 44 per cent stake in Vimpelcom, Russia's second-largest mobile telephone company. Alfa had put up the shares as collateral against the loan from Deutsche.

The decision came a day after Russia's richest man, Oleg Deripaska, was granted $4.5 billion to repay loans to foreign banks that had been used to buy 25 per cent of Norilsk Nickel. Mr Deripaska's UC Rusal company faced having to surrender the shares in the world's biggest nickel producer if it failed to refinance the loan by today.

VEB had said that individual companies would get no more than $2.5 billion from the $50 billion fund provided by the Government to help Russian businesses struggling to refinance. Mr Deripaska, who is regarded as particularly close to the Prime Minister, Vladimir Putin, appears to have enjoyed more favourable treatment.

Rosneft, the state-controlled oil company, whose chairman is Igor Sechin, Mr Putin's close ally, was said to have received $800 million. Russian media reported that further loans went to PIK, the property developer led by Yuri Zhukov, the billionaire, and state-owned Russian Railways, whose chairman, Vladimir Yakunin, is also close to Mr Putin.

VEB has received bids for more than $100 billion from banks and companies, leaving the state in a powerful position to choose which ones to help. Analysts are already speculating about the price that the Kremlin will extract from the oligarchs later on.

Shares rescued from foreign banks are being handed as collateral to VEB, giving the State a chance to undo privatisations from the 1990s or redistribute property if loans are not repaid.

Aleksandr Lebedev, a wealthy businessman and former KGB officer who once spied from the Soviet embassy in London, said that he did not understand why government funds were being used to bail out oligarchs. But he also suggested that rescuing them with public money could prove useful.

“You should just tell the population you got cheated in the 1990s, they gave it all to these chaps who have now just brought it back again. Then you could privatise these assets in a few years, but privatise them in the proper way,” he said.

Russia is pouring huge sums into supporting the financial markets and the value of the rouble. The Central Bank reported that its foreign reserves fell by $31 billion last week, taking it below $500 billion for the first time in eight months.

The sum was almost double the amount spent in the previous week, leaving Russia with reserves of $484.7 billion. Dealers said that $13 billion had been spent to support the rouble against speculative attack.

The Bank introduced daily limits on currency swap operations last week to deter speculators gambling on a fall in the rouble's value. However, the speed at which Russia is depleting its reserves is raising doubts about the Bank's ability to avoid a devaluation.

Russia's stock markets bounced back strongly yesterday as VEB announced that it expected to invest 5 billion roubles (£116 million) in shares each day. The dollar-denominated RTS index rose 17.8 per cent to 758.71, while the Micex exchange, which trades in roubles, was up 19.5 per cent to 727.39. Sberbank, Russia's biggest lender, rose nearly 30 per cent, Gazprom was up 18 per cent, while shares in Rosneft, the oil company, added 28 per cent. Moscow's indexes are now up about 40 per cent since trading recommenced on Tuesday after the exchanges were suspended last Friday afternoon.

If the rally is maintained, it would be the best weekly showing for the Micex in a decade and for the RTS since its creation in 1995. But Micex is still down 29 per cent since the start of October and the RTS is off 38 per cent.

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